Post by
geezer21 on Jan 18, 2025 12:11pm
The Game is Afoot
Trump imposition of tariffs is akin to stricking a match to light up a cigarette while pumping gas.
There will be backlash to U.S. tariffs. There will be negative consequences. Tariffs will exacerbate dedollarization of the U.S. reserve currency already under way for several years and accelerating significantly in the last two years as seen in the accumulation of gold since gold was made a tier one asset at the start of 2023 and in the accumulation of other tangible assets like commodities.
For example South Korea.
South Korea has $420 billion in foreign reserves, 9th in the world.
https://www.youtube.com/watch?v=zzyhcEzUpt8
Over half of that, 229 Billion, as of last November, is US Treasuries.
https://ticdata.treasury.gov/resource-center/data-chart-center/tic/Documents/slt_table5.html
Starting in 2019 South Korea significantly upped its annual purchase of gold 2.3 x to 104.45 tons. The average since 2000 is just 59.71 tons. Prior to 2019 Korea averaged annual gold purchases of 44.8 tons.
https://tradingeconomics.com/south-korea/gold-reserves
Not only has South Korea upped their purchases of gold to diversify their holdings and dump USTs the Korean population is buying gold hand over fist.
https://www.cnbc.com/2024/05/08/gold-is-selling-like-hot-cakes-in-koreas-convenience-stores-vending-machines.html
As a result of Trump's threat of tariffs South Korea and others are now considering converting more of those UST into U.S. oil.
https://www.zerohedge.com/energy/south-korea-looks-boost-american-oil-gas-purchases-appease-trump
With South Korea and other nations dumping UST there is a over supply of treasuries flooding back into the United States hence the reason why treasury yeilds are climbing and gold is also climbing at the same time and the dollar is climging. Gold inverse relation to UST no longer holds.
Fiat currency is rushing to safe havens. Momentum is picking up.